Discussion of various forms of Advance Fee Fraud, including application fees for loans that never materialize, self-liquidating loan scams, as well as mortgage elimination scams and related debt elimination scams [Nigerian-type scams should go in the Nigerian 4-1-9 forum]

If you are going through a foreclosure, there are certain warning signs that you are dealing with someone that is selling a service that is less than legit. Sometimes, not so legit methods can delay the inevitable, for a short time, but often they expose the borrower to criminal liability and also can cost many thousands of dollars in the long run. But, based on what I've seen, I would say the following are red flags to look for.

This is not intended as legal advice for any particular person's case, but are some general thoughts, not aimed at any firm or group or person.

1. It isn't a law firm - If you want to stop a leak, you hire a plumber. If you want to catch a mouse, you buy a cat. If you want your taxes done, you don't hire a carpenter. This seems plain enough, but for some reason, probably cost, people are continually suckered into hiring non lawyers to help them save their home.

2. It only half commits to being a law firm - A real law firm is a business that is composed of lawyers, people who historically practice law for a living. If they are new admittees, or even worse, a bunch of non lawyers who sell you on the idea that they have "lawyers on call" or a "staff lawyer" or "share office space with lawyers" then there is a serious problem. It means you are hiring a non lawyer and have no guarantee that legal knowledge will be applied to your situation or problem. See #1, above.

3. It is a law firm that won't use the names of its members - while it is pretty common to have businesses function with fictitious names, lawyers generally do not. For some reason an untold number of quasi-law firms and questionable loan mod firms have names that elicit an appeal to patriotism or something generic sounding (_____ law group). There is nothing illegal about it, but ultimately, you are hiring a professional, not a faceless "law group". Why is it that they are hiding their name? High turnover?

4. It doesn't follow state laws about its business - In many states a lawyer can't charge an advance fee for a loan modification. If it is doing that, then the firm is suspect. Part of being an attorney is having some respect for the law. If you hired a firm that doesn't have that and risks its license, what does that tell you about how well it will protect you?

5. Strange legal theories only they know how to use - If you are dealing with someone who is purports to be the only person or firm or "group" that knows how to accomplish something, beware. I would personally run at that mere suggestion.

6. Silly UCC games and sovereign citizen talk - If they want to play word games about whether or not you are a person, run. If they want to get into UCC theories, especially if they are not a lawyer, run. While there is some minimal application of UCC article 3 to mortgages in some situations, or UCC article 9 in others, it is not something that can be universally used to solve the mortgage problems of everyone.

7. Adverse Possession talk - If the firm you hire says you have been adversely possessing your own home, hopefully you already know they are all wet. But if you don't know that, they are. Run.

8. Wants to sue the lawyers at the foreclosure firm - Suing a low level associate at a foreclosure law firm is a joke of a method that I've seen tried many a time. It doesn't work. Unless there is truly something fraudulent going on which they have evidence of involving the lawyer, and that is something extremely rare.

9. Filing questionable documents at recorders office - If the scheme involves filing documents that aren't legitimate at a recorders office, then run. For example, claiming that you are your own creditor, or documenting fake transfers, etc. Just because the recorder accepts the document doesn't mean their scheme is valid; it just means they have filed a false document which must be expunged.

10. Murky backgrounds of participants - If one cannot readily tell why someone is credentialed to give legal advice on foreclosure law, then they probably aren't. If their website is just full of emotional appeals to their faith in God, love of family, and hatred of the banks, but no real reason to hire them, then run.

11. Appeals to faith/ affinity - Overemphasis on "belief in God". You don't require this of your plumber, do you? It fails to address real qualifications and is problematic for that reason.

12. Abuses the term "common law" - the world of pseudo law has thoroughly abused this simple term which just means "case law" if you went to law school. To them it means some kind of alternate legal universe where they can invent their own procedures and don't have to follow codes and statutes. That isn't common law, it is pseudo law.

1. It isn't a law firm - If you want to stop a leak, you hire a plumber. If you want to catch a mouse, you buy a cat. If you want your taxes done, you don't hire a carpenter. This seems plain enough, but for some reason, probably cost, people are continually suckered into hiring non lawyers to help them save their home.

What kind of comment is that? Russ Porisky, Canada's greatest anti-tax champion, was a carpenter with no legal background whatever yet he showed hundreds of Canadians a fool-proof way to totally eliminate taxes from their lives. Let's see a lawyer do that! Sadly his methods ended up being deemed to be tax evasion by Canadian courts with disastrous consequences for his clients but for a while we ruled the world in believing carpenter tax charlatans!

"Yes Burnaby49, I do in fact believe all process servers are peace officers. I've good reason to believe so." Robert Menard in his May 28, 2015 video "Process Servers".

1. It isn't a law firm - If you want to stop a leak, you hire a plumber. If you want to catch a mouse, you buy a cat. If you want your taxes done, you don't hire a carpenter. This seems plain enough, but for some reason, probably cost, people are continually suckered into hiring non lawyers to help them save their home.

What kind of comment is that? Russ Porisky, Canada's greatest anti-tax champion, was a carpenter with no legal background whatever yet he showed hundreds of Canadians a fool-proof way to totally eliminate taxes from their lives. Let's see a lawyer do that! Sadly his methods ended up being deemed to be tax evasion by Canadian courts with disastrous consequences for his clients but for a while we ruled the world in believing carpenter tax charlatans!

I just re-read my post, and I kept thinking that there are multiple practitioners out there who probably think it could have been written just for them. It isn't. It is just a set of observations, from the point of view of moi.

Bovine, Flatulating: wrote:1. It isn't a law firm - If you want to stop a leak, you hire a plumber. If you want to catch a mouse, you buy a cat. If you want your taxes done, you don't hire a carpenter. This seems plain enough, but for some reason, probably cost, people are continually suckered into hiring non lawyers to help them save their home.

Hey, I'm a carpenter and I give tax advice all the time. I tell them that they're idiots when they come out with a bunch of hogwash. I tell people that they should pay the minimum required but that they need to pay. I help people think of what they need to file. And, thanks to Q, I actually have given a CPA advice on frivolous positions and directed him to Dan's FAQs. I answer simple tax questions and help people find where they need to go to get better answers. I've actually done my taxes before WITHOUT using Turbo Tax (and it sucked too, trying to figure mileage by hand, actually write up my Schedule C and SE and a 1040 long, sigh).

Lift me up above this, the flames and the ashes,Lift me up and help me to fly away.Lift me up above this, the broken, the empty,Lift me up and help me to fly away,Lift me up!

Bovine, Flatulating: wrote:1. It isn't a law firm - If you want to stop a leak, you hire a plumber. If you want to catch a mouse, you buy a cat. If you want your taxes done, you don't hire a carpenter. This seems plain enough, but for some reason, probably cost, people are continually suckered into hiring non lawyers to help them save their home.

Hey, I'm a carpenter and I give tax advice all the time. I tell them that they're idiots when they come out with a bunch of hogwash. I tell people that they should pay the minimum required but that they need to pay. I help people think of what they need to file. And, thanks to Q, I actually have given a CPA advice on frivolous positions and directed him to Dan's FAQs. I answer simple tax questions and help people find where they need to go to get better answers. I've actually done my taxes before WITHOUT using Turbo Tax (and it sucked too, trying to figure mileage by hand, actually write up my Schedule C and SE and a 1040 long, sigh).

The point wasn't to insult carpenters, I hope you know...you sound like you have more proficiency than I do on the subject!

Having written extensively on the issues related to the mortgage foreclosure crisis, I would note that even experienced lawyers have had little success in challenging the "mess" created by sloppy securitization of mortgage obligations. Most courts seem to think that UCC -mandated procedures, etc., could be ignored so long as the result required the borrower to pay what "must" or "should" be the proper party. In other words, failure to follow the requirements of the UCC concerning transfer of notes was not enough to let the borrow off of the hook when the original note or evidence of negotiation was not clearly present.

At this late date, attempting to postpone or stop a foreclosure with the sort of stuff that floats around the internet is guaranteed to put the borrower in a worse position than before.

As an aside, I would point out that, if the numbers are large enough, justice can be served. The accidental release pre bankruptcy by J.P. Morgan of an Art. 9 lien securing a $1.5 billion loan to General Motors has been held, by the 2nd Cir. and the Delaware Supreme Court (to which the Circuit certified a question), was a mistake that the Courts could not "fix." See In re: Motors Liquidation Co, case no 13-2187, 2nd Cir., Jan. 2015. See also http://abovethelaw.com/2015/01/mayer-brown-simpson-thacher-make-epic-screwup/

I agree, securitization arguments are rarely successful even with the best attorneys available. In my particular state, most foreclosures are nonjudicial and the courts just don't want to hear it. The only sliver of hope is in the Glaski decision, which has two contrary appellate court decisions one can cite that hold the opposite. The Ca Supreme Court has agreed to hear those other cases and will resolve that conflict. But beyond that, nothing.

I sometimes talk to people who have very intricate, detailed legal theories involving securitization and how "securitization is bad, mkay." They often know more than I do about this area of the world. They offer to show me youtube videos. I tell them I don't need to know it because the Court doesn't care.

Recently I read a law review article by Douglas Whaley on how "show me the note" defenses should be valid defenses, using Article 3 of the UCC for support. Whaley authored the text I used in law school 20 years ago in my article 9 class. One can't readily dispute his knowledge. And yet, he is one who suggests the correct view is one which just flat won't fly all day long in any court here.

There are however other categories of cases that can be litigated successfully, but not many of those are good ones, either.

13. They tell you that "all" (or substantially all or nearly all) mortgages are "fraudulent" or unenforceable. Laypeople use the term fraud about 10 times more often than lawyers do. Lawyers allege fraud about 10 times more often than judges see it. When you run into someone who is telling "everyone" that their mortgage is fraudulent, that should be a red flag.

14. Lawyers who have consistently received similar negative complaints from many clients - there is probably a reason for them. Common sense goes a long way.